TaxTMI 
TaxTMI 
2012 (12) TMI 337
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.... of assessment from the particulars furnished by the assessee, the A.O. noticed that assessee had acquired lot of urban land in the area of Vesu, Surat. The A.O. was of the view that market rate per sq. mtr. was more than Rs. 10,000/- whereas the assessee was showing the cost of land acquired by him as Rs. 74/- per sq. mtr. On verification of Surat Urban Development Authority (SUDA) u/s. 133(6) it came to the knowledge of the A.O. that the auction piece of land is between Rs. 5,000/- per sq. mtr. to Rs. 13,200/- per sq. mtr. The assessee was asked to clarify and show cause as to why the undisclosed investment of land not be estimated at the prevailing jantry rates. 3. The assessee interalia submitted that jantri price cannot be used as a m....
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....land at the rate of Rs. 510/- per sq. mtr. as against the rate of Rs. 74/-per sq. mtr. considered by the assessee and accordingly worked out the value of land at Rs. 97,41,000/-. After considering the value of Rs. 14,13,400/- disclosed by the assessee, he added the net undisclosed investment of Rs. 83,27,600/- to the income of the assessee. Aggrieved by the action of the A.O., the assessee carried the matter before CIT(A). 4. Before CIT(A) it was submitted that the deeming provisions as contained in section 50C cannot be applied while invoking Sec. 69B. It was further submitted that addition if any can be done u/s. 50C in the hands of the seller and no provisions of the Act permits the A.O. to estimate transaction price and add the differe....
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....stimated transaction price. The comparable sale instances can be constructed as guide to indicate that investment recorded in the books may be understated. But this fact alone is not good enough to justify the addition on account of undisclosed investment in the property. Much more was required to be done by the A.O. by way of adducing supporting evidence to sustain the addition u/s. 69B, which has not been done nor brought out in the assessment order. 12. The only provision under the Act where recourse to the value adopted by the State Valuation authorities can be taken in section 50C.There is no other section in the Act which authorizes the A.O. to take any action particularly under section 69B by placing reliance on the value adopted by....
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....ade the addition. He thus submitted that the order of the A.O. be upheld. 7. On the other hand the Ld. A.R. submitted and placed on record the copies of the agreements and its English translations. The Ld. A.R. submitted that the assessee was not provided with the copy of any data or evidence based on which the A.O. had stated that the rate of land varies between Rs. 5,000/- to Rs. 13,200/-. Even the copy of Satakhat on which the A.O. had placed reliance was not made available to assessee for offering clarification. The Ld. A. R. also placed on record the copies of the application filed by the sellers of the land before the Court in respect of interest in plot of land. It was further submitted that provisions of section 50C cannot be appli....
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....ellery or other valuable article, and (2) If it is found that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in that behalf in the books of account maintained by the assessee, and (3) Either the assessee offers no explanation about such extra amount or the explanation offered by him is not satisfactory. 10. The above conditions are cumulative. If all these circumstances exist, the excess amount may be deemed to be the income of the assessee for the financial year in which the said investment was made or the assessee became the owner of bullion etc. 11. The factual position in the present case is that during the year the assessee had....
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....nue to prove that the real investment exceeds the investment shown in the books of accounts of the assessee. 14. In the case of Smt. Amar Kumari Surana v. CIT [1997] 226 ITR 344 the Hon'ble High Court has observed as under: "10. It is true that merely on the basis of fair market value no addition can be made u/s. 69B of the Act, 1961, but on the basis of sufficient material on record some reasonable inference can be drawn that petitioner has invested more amount than the shown in account books, then only the addition u/s. 69B can be made. The burden is on the Revenue to prove that real investment exceeds the investment shown in account books of the assessee." 15. In the case of ITO v. Harley Street Pharmaceuticals Ltd. [2010] 38 SOT 486 ....